JAMES CONEY: Will practical problems slow launch of the Super Isa and leave the entire banking system on the brink?

Everyone was caught on the hop by the Chancellor’s Budget day announcement of a new £15,000 Super Isa.

While most organisations were broadly supportive of the move, it was clear that there were going to be practical problems.

Not least because the computer systems which banks use to transfer cash Isas are not the same as the computer systems fund managers use to switch share Isas.

New rules: Everyone was caught off guard by the Chancellor George Osborne's Budget day announcement of a new £15,000 Super Isa

On top of this, some smaller building societies don’t transfer Isas electronically, and moving your investments from one Isa to another is not straightforward at the best of times.

And the rules on transfers for cash and shares are not consistent.

These shouldn’t be insurmountable obstacles, though. Most banks and building societies have managed to sort out one issue, that of letting people top up fixed-rate Isas when the bigger allowance comes in.

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And some are also developing a single Isa that allows you to move freely between cash and shares (although as anyone who invests at a fund supermarket knows, this has always been possible — you just don’t get a good rate when your money sits in cash).

But now with just 41 working days until the Super Isas begin on July 1, it has become clear there will be no single computer system that can support transfers. Behind the scenes, Isa providers are very worried.

Most are desperately trying to get a feel for just how many people will want to move between cash and shares.

They know that if there is no technological solution, then transfers will have to be done by hand. And that means paying human beings to do it.

History has shown time and again that financial organisations are pretty useless at investing in customer service.

They do it only when things reach crisis point — and that’s often too late.

We are on the brink of another Isa transfer meltdown. When this happened in 2008 bags of post went unanswered for weeks.

Regulators need to be alert before savers start sending their money in to a black hole.

Lost in jargon

It was brave of Fidelity to volunteer to be put through our experiment with three sets of first-time investors — and I thank them for their help. They’ve been extraordinarily accepting of the points raised by these novices. If only other companies were willing to take criticism on the chin like this.

The investment industry is loaded with jargon and complexity.

And once you’re in the Forest of Flim-Flam it is hard to see the wood for the trees.

This is why even though some firms are working hard to support first-time investors through this intensely difficult decision-making process and make it as simple as possible, you can still be confronted by a jungle of jibberish.

Part of the problem is the institutional pig-headedness of many in the industry.

Their attitude is that if you can’t understand the language, then you shouldn’t be investing — or even that we little people simply don’t need to know what these masters of fund management are doing with our money.

At Money Mail we do our darndest to write in a simple way that we think readers will understand. We have reams of experienced, intelligent people who read our pages before they go to press — crucially many are outsiders to the world of finance.

Without fail one will always ask: ‘What does this mean?’ when reading through a description of a fund or a type of investment.

It’s an invaluable question. I wonder if the fund managers or supermarkets have the same checks in place. People who’ll say: ‘What does clean mean?’ or ‘What in heaven’s name is an index tracker?’

We’ve always argued that if you don’t understand something, you shouldn’t invest in it.

And on that basis I hope those firms who refuse to make life easier for first-time investors realise they have to change their ways if they want to get their hands on savers’ money.

Hard questions

It’s less than a week since tough new mortgage rules came in.

So, industry bible Mortgage Strategy spoke to a number of brokers to find out what questions home loan applicants were being asked. Here are some of the gems that they discovered:

How much do you spend on nappies and other child-related perishables? What is your monthly expenditure on pet food? When you move home will you continue paying £21 a month on your milk delivery?